Tax Evasion and Tacos

Apparently there must be a lot of money in tacos. Karl James, a former owner and operator of more than 50 Taco Bell franchises in Southern California and Arizona, was sentenced to serve 36 months in jail and three years of supervised release months for bankruptcy fraud and tax evasion. James was also ordered to pay $1,121,829 to creditors who were victims of the bankruptcy fraud and $1,169,957 to the Internal Revenue Service (IRS) for unpaid taxes.

James, president and CEO of Golden West Tacos, Inc., pled guilty to charges of bankruptcy fraud and tax evasion on October 19, 2005. According to a press release issued by the Department of Justice, James’ tax fraud involved failing to report over $3 million in diverted corporate funds on his personal income tax returns. James concealed the transactions by moving company assets to other company accounts and accounts in the name of others.